China’s 'List of Unreliable Entities' Will Not Scare Off Foreign Firms

Such concerns underestimate the appeal of the Chinese market and the business judgment of multinationals, writes commentator for the overseas version of the People's Daily

By
Xu Mouquan
Updated Jun.11

China’s Ministry of Commerce (MOFCOM) announced on May 31 that the country will establish a “list of unreliable entities,” reported haiwainet.cn, the overseas website of the Party-run newspaper People’s Daily.

While some have expressed concern that foreign businesses will be scared away, staff commentator Wang Fazhi cited a ministry spokesman in writing that only “foreign enterprises, organizations and individuals that do not comply with market rules, violate the spirit of contract, block or cut supplies to Chinese firms with non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises will be added to the list.”

Saying that foreign firms will be scared away both underestimates the appeal of the Chinese market and the multinationals’ business judgment, Wang wrote.

Amid trade frictions, foreign investors have not pulled out of China. For the first four months of 2019, China’s actualized use of foreign investment was up 6.4 percent year-on-year, while the US’s investment in China grew by 24.3 percent y-o-y.

By taking proper countermeasures against conscientious rule breakers, China will not obstruct the decisive role of the market in resources allocation and protect stable, fair and sustainable trade among businesses, he wrote.

Since 2018, China has rolled out various policies to level the playing field, from easing access restrictions to its foreign investment law. Yet some foreign businesses coordinate with the US government to engage in long-arm jurisdiction against Chinese firms, while raking in huge profits from the Chinese market, Wang said.

Ready to share its huge domestic market with the world, China is also committed to improving its business environment and protecting the legitimate rights and interests of all foreign-funded firms given they comply with Chinese law, he wrote.The plan could ease energy demand and stress on the environment, upgrade consumption and foster growth in new industries, writes a commentator for The Beijing News.

News China magazine is published monthly. Our articles cover international news, the economy, Chinese culture, the environment and much more….We present news in an honest and open way, crafted as if we are telling a story.